Good news for anyone looking to save more for retirement – the IRS announced recently that investors can put an extra $1,000 in their 401(k)s in 2022.
The contribution limit for workplace retirement accounts, including 401(k)s, 403(b)s, most 457 plans and Thrift Savings Plans, is being raised from $19,500 to $20,500.
Catch-up contributions for those accounts is not changing: Investors age 50 and older can contribute an additional $6,500, bringing the total they can put in these accounts to $27,000.
The amount workers can contribute to individual retirement accounts (IRAs) remains unchanged at $6,000. The catch-up contribution amount for those accounts will also stay at $1,000, meaning those 50 and over can invest up to $7,000 next year.
Additionally, the income ranges to be eligible to contribute to Roth IRAs increase next year. The new phase outs are: between $129,000 and $144,000 for singles and heads of households (up from $125,000 to $140,000), and $204,000 to $214,000 for married couples filing jointly (up from $198,000 to $208,000).
The amount individuals can contribute to a SIMPLE (savings incentive match plan for employees) retirement account will also increase, from $13,500 to $14,000.
For more information on cost-of-living adjustments to retirement accounts, see the IRS’s release.
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